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Fraudulent and Frivilous Compensation Claims

Lord Falconer has unveiled aggressive measures, including the formation of a new Claims Standards Council, to curb Britain's compensation culture. The plans are the government's response to a Better Routes to Redress report issued by the Better Regulation Task Force.

Those in the claims management business that encourage clients to seek out and file frivolous accident claims, specifically based on a 'no win - no fee' basis, have been fairly warned. The new council will not tolerate such behaviour and companies are warned to desist.

The Task Force's report Better Routes to Redress addresses the same issues as previously published, The Cost of Compensation Culture, but presented the issues with a very different set of conclusions. The Task Force is emphasising that the victim should be the central focus and the most important person in the entire claims process.

"If you have a genuine claim - where someone else is to blame - you should be able to get compensation from those at fault. This is only fair. The victim or the tax payer shouldn't have to pay out where someone else is to blame. But there is not always someone else to blame. Genuine accidents do happen," Lord Falconer said. "The perception that there is easy money just waiting to be had - the so-called 'compensation culture' - creates very real problems."

The task forces wishes to work in concert with reputable claims management firms, law firms, insurers, and local authorities. The goal is to create a society where all people are confident about taking risks and not afraid of litigation all the time. According to Shadow Home Secretary David Davis, what is needed is an emphasis on ways to 'nurture a culture of responsibility and common sense' rather than pretending the 'compensation culture will go away by itself.'

Conservatives argue that the compensation culture is a result of an emphasis on individual rights, and assert that the human rights industry and the effect of the Human Rights Act cost the UK £10 billion a year in claims. Last year, the number of accident claims fell by 9.5%.

The immediate goals of the Better Regulation Task Force are to enforce regulations, particularly in relation to how claims firms deal with claimants who will soon be regulated by the new Claims Standards Council. Another task force mandate is to education victims and potential claimants in regards to certain 'ambulance chasing' doctors that should be avoided and to encourage alternate dispute options.





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